What Will We Cover in this Annuity Review?
In this review, we will be discussing the following details on the American Equity Investment Life Insurance Company’s IncomeShield 7 fixed indexed annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How this annuity is best used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you have been thinking about purchasing an annuity so that you can attain tax-deferred savings, as well as a guaranteed lifetime income in retirement, then the American Equity Investment Life Insurance Company’s IncomeShield 7 fixed indexed annuity may be a good choice for you.
But, before you run out and commit to this annuity – or to any annuity – it is highly recommended that you first attain a good understanding of how the annuity works, and how it may (or may not) work for you.
Throughout the past several years, the fixed indexed annuity, in particular, has become extremely popular. This is because a fixed indexed annuity, or FIA for short, can essentially offer the best of both worlds…or at least it can appear that way.
That is because these annuities provide the opportunity to receive positive growth when an underlying market index is being tracked and performs well, while also protecting your principal if the underlying index performs poorly.
As an extra added bonus, FIAs also provide the ability to receive a guaranteed income for the remainder of your life (as well as that of a spouse or partner, if applicable) – regardless of how long that income may be needed.
But, due in large part to the increased number of new-fangled products that are being pushed out into the marketplace by insurance companies – each trying to outdo the other – these particular annuities can also be extremely confusing. So it makes it even more essential that you read over all of the fine print before you commit what could be a large percentage of your savings to this annuity.
Annuity and Retirement Income Planning Information That Can Be Trusted
If this is your very first visit to our website, we would like to formally welcome you to Annuity Gator. We are a team of annuity professionals who have a key focus on offering comprehensive – yet non-biased – annuity reviews online.
We’ve been at this for quite a long time now, and far longer than our competitors have – although many of them would like to have you think otherwise. Due to our experience and longevity in this arena, we have become very good at what we do, and we’ve actually come to be known as a trusted source of annuity information.
If you’ve been reviewing annuities on the Internet, it is possible that you have come across some highly conflicting information about these products. This, however, isn’t really all that uncommon, as there are many different annuities, and there many different thoughts about them.
It could also be that you have recently attended an annuity seminar where, in return for a free dinner or lunch, the presenter had your attention while he or she described the American Equity IncomeShield 7 annuity. It may even have been your attendance at that event that has led you online, on a quest for more information.
When doing your annuity research, you may have run across some of the other websites out there that discuss annuities – but are more interested in simply obtaining your contact information. In order to do this, whey will oftentimes attempt to “lure” you in by making some outrageous claims about the annuities that they offer, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Does this sound familiar?
But, even as nice as these claims may be, it means that it is even more necessary for you to make sure that they are actually true before you move forward and commit a large chunk of your money to such products.
In any case, if you have been looking for more in-depth details about the American Equity Investment Life Insurance Company’s Income Shield 7 annuity, you are definitely in the right place.
In fact, we dare say that the website that you are on right now is the only place online where you can obtain all of the information that you require for making a well-informed purchasing decision about this annuity.
Before we get too far into this review, we do want to be perfectly clear in stating that we believe that annuities can be a very viable financial option for some people – provided that they fit in with your other short- and long-term financial goals.
So, if you’re ready to begin this review, let’s go ahead and dive in!
American Equity Investment Life Insurance Company’s IncomeShield 7 Annuity at a Glance
|Product Name||IncomeShield 7|
|Issuer||American Equity Investment Life Insurance Co.|
|Type of Product||Fixed Indexed Annuity|
|Phone Number||(888) 221-1234|
Opening Thoughts on the American Equity IncomeShield 7 Fixed Indexed Annuity
American Equity Investment Life Insurance Company is a company that is well known for being a specialist in the annuity niche. This company was founded in 1995 – and, even though American Equity is considered by some standards to be “newbie” in the insurance and annuity industry, it has definitely made a name for itself in just a short period of time. This is especially true in the area for fixed and fixed indexed annuity products.
American Equity Investment Life Insurance Company is considered to be strong and stable from a financial perspective, and it has also earned good, positive ratings from the insurer rating agencies. These include an A- from Standard & Poor’s, and an A- from A.M. Best.
Over the past several years, in large part due to the highly volatile stock market, more people have been taking a closer look at fixed indexed annuities. This is because, in addition to keeping principal safe (in any market condition), these financial vehicles can also provide you with the opportunity for ample growth, as well as a set amount of income that could last you for the remainder of your lifetime.
Yet, even though this might sound like a win-win-win situation, the reality is that if something sounds like it may be too good to be true, then it typically is – so you should ideally get as much in-depth detail as possible if you are considering committing to it for the long term.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. American Equity has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see out perspective when breaking down the positives and the negatives of this particular annuity. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How American Equity Describes the IncomeShield 7 Annuity Product
American Equity Investment Life Insurance Company describes its IncomeShield 7 fixed annuity as a product that offers premium bonus options and multiple allocation choices for growth opportunities, while also providing principal protection and flexible lifetime income payouts.
In the first year, your paid-in premium can also receive a bonus that is credited to the contract value and that vests over time. This can allow you to essentially “jump start” your retirement revenue pool.
Given its multiple interest crediting options, you have the opportunity to put some or all of your money in either of the following:
- Fixed interest strategy where the return is set at the time of issue and is guaranteed for a certain period of time
- Fixed indexed strategy, where your annuity premiums can be directed to an underlying market index for added growth opportunities and are linked to the performance of a particular index (or indices)
In the case of the IncomeShield 7 annuity, the options for index tracking include:
- S&P 500 – The S&P (Standard & Poor’s) 500 Index consists of 500 leading U.S. stocks, and is commonly used as a benchmark of the overall stock market
- S&P 500 Dividend Aristocrats Daily Risk Control 5% Index – This index consists of the Standard & Poor’s members that have consistently increased their dividends each year for at least 25 consecutive years.
There are some additional bells and whistles that you will find associated with this annuity. These include a(n):
- Death Benefit – Death benefit proceeds can be paid to a named beneficiary (or beneficiaries) with no surrender charge, plus 100% bonus vesting, if the annuitant dies before the income has been paid out.
- Terminal Illness Rider – If, after the first year, the annuitant is diagnosed with a terminal illness, a 100% free withdrawal may be accessible.
- Nursing Home Care Rider – If the annuitant is receiving qualified long-term care services, he or she may also be able to access funds from the annuity without incurring a withdrawal penalty.
There are also some income rider options that may be chosen with the IncomeShield 7. This can allow for some added income flexibility. For instance, the Lifetime Income Benefit Rider (LIBR) can help to secure a lifelong income source for annuitants who are age 50 or over at the time of issue. With this option, the income payment amount to be received is measured by an income account value that is credited over time.
How an Insurance or Financial Advisor May Pitch this Annuity
For a while now, fixed indexed annuities have been touted by insurance and financial advisors are the solution to having an opportunity for growth, yet without having to worry about the loss of principal if the market should take a dive.
But it’s really important to be careful here, as a jack of all trades is oftentimes a master of none. With that being said, while you can definitely achieve a higher rate of growth than you could with a regular fixed annuity, the fixed indexed version will typically “cap” that growth. That means that, even if the underlying index being tracked has a stellar year, you will only be able to participate in a certain percentage of it.
Plus, even though insurance companies will oftentimes exclaim that their annuities are “liquid,” this is not the case, at least entirely. For example, with the IncomeShield 7 annuity, you are allowed to take out up to 10% of the contract value during the first 8 years of owning the contract, if you withdraw any more than that amount, you will be hit with a surrender penalty. With that in mind, you need to be sure that the money you place into this annuity is money that you won’t need to rely on for emergencies or any other short-term item.
What About the Fees on this Product?
As is the case with other annuities, the American Equity IncomeShield 7 does have some fees that you will need to be mindful of. First, if you choose from any of the various riders that are available, you will be charged annually, anywhere from .90% to 1.00%, depending on the option you go with.
The surrender charges per year on the IncomeShield 7 annuity are as follows:
Surrender Charge Schedule (Age 50 to 80)
|Surrender Charge %||9.2||9||8||7||6||4||2||0|
In addition, the taxable portion of any withdrawal that is taken before the annuitant reaches age 59 1/2 can also incur an additional 10% early withdrawal fee from the IRS.
The Annuity Gator’s End Take on the American Equity IncomeShield 7 Annuity
Where it works best:
Although this annuity may not be ideal for everyone, it could be a nice option if you are seeking the following features:
- The option for market index-linked growth
- Protection of your principal
- Guaranteed income in retirement
Where it works the worst:
The IncomeShield 7 annuity may not, however, work very well in all situations. This is especially the case if you:
- Are seeking the opportunity for an uncapped rate of return
- Want or need to access more than just 10% of your money within the first 8 years of purchasing the annuity
- Do not plan to use the lifetime income feature on the annuity
When thinking over the purchase of an annuity, it is critical that you consider a long list of criteria. These should ideally include the annuity’s options for growing your money, as well as the way that it keeps your principal safe. And, because many people purchase annuities for the purpose of receiving long-term income, this too is extremely important.
If you are still leaning towards the American Equity Investment Life Insurance Company’s IncomeShield 7 fixed indexed annuity, then you can be assured that your money will be safe, no matter what happens in the market. You can also count on a lifetime income in the future.
Yet, even with all of the awesome benefits that this annuity can provide you with, there could still quite honestly be a better option out there for you. With that in mind, it can be extremely beneficial to have this annuity tested, based on your specific parameters. We are happy to provide this testing for you at no charge or obligation. If this is something that you would be interested in, then please just let us know by completing our secure online form here.
Do You Have Any More Questions About the American Equity IncomeShield 7 Annuity? Did You Happen to Notice Any Mistakes in this Annuity Review?
We know that this annuity review was a bit on the long side – and for that, we truly thank you for sticking with us through to the end here. Our feeling is, though, that we would much rather provide you with a tad bit “too much” information about these products that not provide you with enough.
Therefore, if you felt that this annuity review was helpful to you, then please feel free to share it and forward it on to anyone else that you think might also benefit from it. Likewise, if this review posed even more questions, then please let us know that, too.
Are there any other annuities that you would like to have us review on our website?
There is a long list of annuity products out there in the marketplace today. So, if there is one (or more than one) that you would like to have us review, then please let us know the name, or names, of the annuity, and our annuity “geeks” will get to it ASAP.
Thank you for visiting our AnnuityGator.com site, and be sure to check back often for new and updated information regarding all things annuity.
The Annuity Gator
P.S If you would like to read more of our American Equity annuity reviews here are some links to check out:
- American Equity Foundation Gold Annuity with Income Rider LIBR 6%
- American Equity Bonus Gold Annuity
- American Equity Choice 10 Fixed Index Annuity
- American Equity Foundation Gold Fixed Index Annuity
- American Equity Investment Life RateShield 10+ Fixed Annuity with IncomeShield Rider
- American Equity 7 MYGA Annuity
- American Equity Guarantee 6 MYGA Annuity
- American Equity Guarantee 5 MYGA Annuity
- American Equity Life Insurance Company IncomeShield 10 Fixed Indexed Annuity